Chinese Banks Ready to Go Bust
by Pivotfarm
ZeroHedge.com
06/21/2013
Dive! Take cover! Or, at least, hold on to your pants in the scramble. The Chinese bubble has just burst. It looks like the world is going to have egg on its face and elsewhere as Chinese banks are scrambling to get the hands on cash.
Chinese cash rates didn’t just increase they shot through the roof today, Friday June 21st. This is not hyperbole. This is not exaggeration. They reached 25% when they were at their peak, and the only thing that calmed them down was the talk of a possible cash injection from the Chinese central bank. Rates dropped to 10%.
Some analysts are saying that the People’s Bank of China is trying to make a point to smaller banks that are using short-term funding for trading rather than lending that money out. That’s dicing with death some analysts reckon as some of the smaller banks are nearing collapse.
Overnight bond purchase rates are the measure of the cost of liquidity and the rates are double what they are expected to be at the present time (8.4920% today, which is lower than Thursday’s 11.62%, but still higher than they should be).
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